Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[hobbes]

 

[Fred42]

These things will barely have any impact. The Model 3 had something ridiculous like 70% or 80% US EV market share last year, in spite of being at a tax credit disadvantage to all of its competitors except GM.

Teslas have already reached cost parity with equivalent ICE vehicles. From a TCO perspective Teslas are actually far cheaper than equivalent ICE vehicles, although awareness of this fact still has some catching up to do.

Furthermore, Teslas are one-of-a-kind in a number of ways. You can't buy any other car with an autopilot system like that in a Tesla, and this is only going to be more of a differentiator as time goes on. A Tesla is also the no-brainer EV to buy thanks to the Supercharger network. People who want an EV because they prefer to drive electric, prefer the convenience of not having to go to the gas station, or want the most acceleration for their buck, are mostly going to buy a Tesla.

I agree with you that all new car sales, including Tesla's, will be affected, but there is a long list of reasons why Tesla will be affected far less. Besides the ones I've pointed out above, Tesla is expending their TAM with the Model Y and MiC M3, and Tesla has always had excess demand, especially as of late, so the first x% drop in new car sales will literally have 0 impact on Tesla.

The purchase price of a VW GTI is $20,000 less than a LR 3, the cheapest Tesla with 300+ mile range. The purchase price difference continues to be a large obstacle to sales, and increased worry about the future increases this significance even for people who can afford to buy the Tesla.

 

[Fred42]

So if I want to post some insight into how the Bay Area may be on way to recovery from covid19 (thus possibly affecting when Fremont starts up again) is that off topic?

Coronavirus

 

[Sanny]

Anyone considered what effect could an Italy's government default or a nation wide bank run will make on current world economy? I mean now people sing on the balconies, but what will happen when they will be let to leave them?

 

[abasile]

Like others, I found this @KarenRei post extremely useful for our TSLA investing. The data shared here tend to support assertions made on Twitter by Elon Musk as to the overall impact that Covid19 is likely to have. Not only is this bullish in general, it may in the long run serve to reinforce Elon's credibility in the eyes of the public as well as world governments.

Starting Monday, I have resolved to be significantly more aggressive in acquiring discounted shares of TSLA. I bought shares at $353 this past week, but not nearly enough. Further, my wife has been encouraging me to buy more, and I'm happy to oblige!

I am not interested in having to read the entire coronavirus thread for gems like this, as I really don't have the time to exhaustively discuss that topic. Although I try, there are days when I can't even keep up with every post in this thread. From time to time, I have to bite the bullet and skip tens of pages. Even so, even when @KarenRei goes a bit off topic, I am very thankful for her participation here!

Getting a bit OT for this thread, so I'll try to be brief: Iceland has a company named deCODE Genetics, which was designed around doing whole-population genetic studies for disease modeling, so the company has been repurposed into doing randomized sampling of the population to look for COVID-19 in people who are not suspect cases - just the general public. They found the disease in around 1% of the general population over a period of a couple weeks (reported 1 week ago) - an implied per-capita rate twentyfold that of the country's official diagnoses at the time of reporting (which in turn has involved one of the most aggressive testing regimes in the world). Over half had no symptoms whatsoever, and the rest, generally just a minor cold.

In an experiment which started several weeks ago, Italy tested the entire town of Vò in a series of rounds and successfully eradicated the disease from the town. Again, this is one of the few cases of experiments of testing of the general population rather than suspect cases. 3% of the population was determined as infected during the first round. 50-75% of them were entirely asymptomatic. Most of the rest had only minor cold symptoms and did not suspect that they had the disease. During the study, asymptomatic cases usually remained asymptomatic, and most minor cases remained minor.

The net picture is that the disease was already widespread even several weeks ago; that people with no symptoms whatsoever are the majority; and of those with symptoms, symptoms so minor that people don't get tested are by far the most common. To match with the death rate (as severe cases almost always get tested), a widespread disease in the population implies a low IFR (infection fatality rate), and implies that places with overloaded medical systems are overloaded not because the disease sends a large percent of its victims to the hospital, but because a large percent of the population has already gotten infected. This implies that the disease will tend to play itself out sooner.

As mentioned, the other study I mentioned (still preliminary) estimated that Wuhan hit a 19% infection rate at its peak, and that the disease had a non-time-delay IFR of 0,04% and a time-delay IFR of 0,12%. They also found (as others have) that the disease is highly prone to nosocomical transmission (spread inside hospitals and clinics, generally by staff) - that is to say, prone to spread to the most vulnerable of patients. I.e. that stamping out nosocomical transmission is one of the most important steps that can be done. Both Wuhan and Lombardy had extensive problems with nosocomical transmission before the severity of the situation was realized.

ED: Well, so much for trying to be brief...

 

[gillfoto]

JFYI, please get the name right, it's the "Democratic Party".

"Democrat Party" is an epithet, a derogatory slur that the Republican party increasingly started using it in the Newt Gingrich radicalization era:

Democrat Party (epithet) - Wikipedia

Political commentator William Safire wrote in 1993 that the Democrat of Democrat Party "does conveniently rhyme with autocrat, plutocrat, and worst of all, bureaucrat".

In 2006, Hendrik Hertzberg wrote in The New Yorker:

There's no great mystery about the motives behind this deliberate misnaming. "Democrat Party" is a slur, or intended to be—a handy way to express contempt. Aesthetic judgments are subjective, of course, but "Democrat Party" is jarring verging on ugly. It fairly screams "rat".​

So please don't use this slur here, the same way you wouldn't call TMC readers "teslings" or "cultists".

Seems like you over reacting:
We are the Democratic Party - Democrats

 

[InDaClub]

Weekend OT

I'd call this good PR for Elon and Tesla.

Medtronic on Twitter

 

[Leo9]

Anyone considered what effect could an Italy's government default or a nation wide bank run will make on current world economy? I mean now people sing on the balconies, but what will happen when they will be let to leave them?

Default? It's not gonna happen. Extremely unlikely scenario.

 

[Lessmog]

Anyone considered what effect could an Italy's government default or a nation wide bank run will make on current world economy? I mean now people sing on the balconies, but what will happen when they will be let to leave them?

Default? It's not gonna happen. Extremely unlikely scenario.

Jail time? Possibly; not likely. (Cf Israel)
Pls note: Totally on-topic!

 

[oldTAVguy]

F, GM, FCAU, DAI, BMW, VOW credit default swaps all implying higher 1y risk of default than TSLA.
Guess who has the lowest credit rating. I'll wait.

Do you have a source or can you provide some data?

 

[SOULPEDL]

Idea on demand concern (not that we need it, but just in case). Couldn't Tesla just extend the terms for vehicle loans from 5 years to maybe 7 or 10 years? This about cuts the monthly payments in half and could be justified because of Tesla longevity over conventional cars. (Ya, just watched that video of a used X for $30K and 400K miles).

I bet Tesla's would last longer than a boat or RV. But insurance would also need to cover, and fortunately, depreciation on Tesla's are extremely low, further justifying sustained value over longer periods of time.

I'm thinking this would reduce cash flow, but as compared to not producing, maybe an option at least short-mid term... iff needed

 

[Cartegena]

I have a question for everyone her. I know this is pretty much uncharted waters so it will all be speculation but...

When this all runs it's course and things start to return to "normal", whatever that is, how do you think the market will recover? Slow steady rise, roller coaster fluctuations or quick rise?

Dan

OT, but still apt:

 

[Artful Dodger]

Ummm...doesn't the fact that CNBC hasn't endlessly repeated it lean to the likelihood that it's real and truthful?

You jest. So there's a negative story about TSLA, but CNBC's not running it?

Lol, people's critical thinking skills shut down too, or were never present:

• Panasonic workers ALREADY were biohazzard suits at work
  
• what is the community based risk level in Reno? Better to stay or leave?
  
• How would Panasonic employees actually travel to Japan? Airlines+borders shut?
  
• Panasonic made no announcement, just a "Alberto Canal" PR, a person never tweeted about it on his own Twitter? Just some generic "Panasonic in Nevada" story on Mar 20.

Nevada: Latest updates on Coronavirus | Live Science

Its FUD, driven by Shortzes. Any element of truth, if present, is buried in the intended emotional content of the story. I'm unmoved.

Cheers!

 

[guidooo]

Anyone considered what effect could an Italy's government default or a nation wide bank run will make on current world economy?

Temporary freezing of some assets. Entities writing off wealth. Other entities buying stuff or non-stuff for a fraction of their value in prosperous times. I didn't study economics.

I mean now people sing on the balconies, but what will happen when they will be let to leave them?

I hope they keep singing, great people.

 

[Sanny]

Default? It's not gonna happen. Extremely unlikely scenario.

Could you please elaborate? I'm genuinely interested, and not knowledgeable on eu countries finances, just read an article about Italian banks being the weakest in the eu even before that stuff.

 

[MC3OZ]

Idea on demand concern (not that we need it, but just in case). Couldn't Tesla just extend the terms for vehicle loans from 5 years to maybe 7 or 10 years? This about cuts the monthly payments in half and could be justified because of Tesla longevity over conventional cars. (Ya, just watched that video of a used X for $30K and 400K miles).

I bet Tesla's would last longer than a boat or RV. But insurance would also need to cover, and fortunately, depreciation on Tesla's are extremely low, further justifying sustained value over longer periods of time.

I'm thinking this would reduce cash flow, but as compared to not producing, maybe an option at least short-mid term... iff needed

If they can get a 35K SR back on the menu in the US.. that would help.

Beyond that more flexible leases as follows may help.

I initially have in mind Model 3 but this could be extended to other cars:-

• Lower up front lease payment.
• Lease term is 6-48 months, customer can return car anytime after 6 months,,
• Lease is transferable to a friend or family member, for a minimal paperwork cost,

People intending to buy a Cybertruck or Model Y, might initially opt just to lease a Model 3 on this basis as a lower risk short term option.

This has to work such that reselling lease vehicles returned at anytime is at least a break-even proposition.

How this works is "perception of risk". Many people are worried about losing their job and on the fence about a car purchase, for every 10 people who are worried, perhaps only 1 will lose their job. Often if they lose their job, they still want to keep the car, and can perhaps ride out short term unemployment.

So this gets people off the fence, and will bring in income in a critical 6 month window.

Returned cars can be resold, used as loaners, and perhaps ultimately used as Robo-taxis

IMO a scheme like this makes sense for SR/SR+ Model 3, for more expensive variants I'm not 100% sure, it does move the cars, but for more expensive variants resale is the only option, the numbers need to stack up...However, most people leasing a more expensive Tesla are in a better job and more confident about their employment prospects, so perhaps that reduces some of the risk.

 

[Zero CO2]

Can you expand upon "there's no real profits in automobiles"? This makes me wonder if you've been reading Tesla's financial statements and whether you understand volume efficiencies, the decreasing cost curves and the size of the addressable market.

Potential profits just from automobiles are huge. While I agree that the potential profits from the energy side of the business dwarfs that of auto, profits from the energy side of the business will not be larger than autos for a few years, at a minimum. As such, they must be discounted for time and uncertainties. Auto profits are ramping now.

someone here is not listening to the earnings calls or reading the financial statements ... but the forward looking thought process is spot on ...

 

[Zero CO2]

As some other people say:
Bier ist flüssiges Brot.

I used to say a "sandwich in every can"

 

[Zero CO2]

Apologies if this has been posted already an excellent data analysis on cv-19 focusing on the right metrics
after reviewing I realize I need to get more aggressive on these TSLA discount shares... this line of thinking has been rattling around in my head but this young man took the time and did the work with a lot of visual aids
Evidence over hysteria — COVID-19

 

[SOULPEDL]

If they can get a 35K SR back on the menu in the US.. that would help.

Beyond that more flexible leases as follows may help.

I initially have in mind Model 3 but this could be extended to other cars:-

• Lower up front lease payment.
• Lease term is 6-48 months, customer can return car anytime after 6 months,,
• Lease is transferable to a friend or family member, for a minimal paperwork cost,

People intending to buy a Cybertruck or Model Y, might initially opt just to lease a Model 3 on this basis as a lower risk short term option.

This has to work such that reselling lease vehicles returned at anytime is at least a break-even proposition.

How this works is "perception of risk". Many people are worried about losing their job and on the fence about a car purchase, for every 10 people who are worried, perhaps only 1 will lose their job. Often if they lose their job, they still want to keep the car, and can perhaps ride out short term unemployment.

So this gets people off the fence, and will bring in income in a critical 6 month window.

Returned cars can be resold, used as loaners, and perhaps ultimately used as Robo-taxis

IMO a scheme like this makes sense for SR/SR+ Model 3, for more expensive variants I'm not 100% sure, it does move the cars, but for more expensive variants resale is the only option, the numbers need to stack up...However, most people leasing a more expensive Tesla are in a better job and more confident about their employment prospects, so perhaps that reduces some of the risk.

Yes, that's another lever if needed, and likely even a better one.
So I am not concerned about demand at all.